Tips for Reducing Your Credit Card Spending
Credit card debt is a little bit different from other kinds of debt. It’s something that’s nearly impossible to escape these days, and (confusingly enough) it isn’t always bad. In fact, you want
to incur small amounts of credit card debt and pay it back in a timely manner so you can prove that you’re a financially responsible person.
The problem is, a little bit of credit card debt can become a lot
of credit card debt before you even realize what has happened. Because credit cards function like open-ended loans, and because you can choose to keep spending that money at any time, these little pieces of plastic are actually pretty dangerous. Even the most responsible person can have trouble with credit card debt because it’s so difficult, if not entirely impossible, to exhibit perfect self-control all of the time.
But there are
ways to get out of debt; no, it won’t be “easy,” and we won’t try to lie and tell you otherwise. There are various options that you can look into, such as debt management, debt settlement, debt consolidation, credit counseling and even bankruptcy. But there are small steps that you can take on your own, even before considering these options. These small strategies might not completely erase your debt, but they’ll certainly make it more manageable.
First things first: cut that credit card apart. We mean literally
cut it apart. Take a pair of scissors, or maybe a heavy-duty paper shredder, and cut it into the tiniest pieces possible. You want to eliminate any chance of impulse spending, and there’s no way you’ll be able to swipe a card that exists in 12 different pieces. (Keep in mind, though, that you may want to save your bank card and one credit card, just for emergencies.)
There are also other ways to eliminate impulse purchases on things you don’t really need. One strategy is to only make purchases with cash -- even if that means you have to go to ATM every week to take out cash. There’s something about counting out the physical money and giving it to someone else that really
gives you an idea of how much you’re spending.
When it comes to the actual credit card bills, there are plenty of strategies that experts suggest. The most important thing you can do when you get credit card bills in the mail is to pay more than the minimum payment. Credit card companies won’t tell you this, but that minimum payment is pretty much just interest fees; only about 1-2% of your actual debt is included in the minimum payment. Companies do this on purpose because the longer they have debtors paying monthly bills, the more money the company will receive in interest payments. The best way to get a debt taken care of is to make sure that you pay more than the minimum amount.
You’ll also have to look at your financial obligations as a whole, and really prioritize your payments. It’s possible that each card you have will come with a different interest rate, and we know that managing so many lines of credit and so many interest rates can get confusing. Experts recommend that you identify the cards with the highest interest rates, as well as the cards with the lowest balance owed, and try to pay those off first. The more you simplify your debt, the more manageable it will become.
Remember: your situation is unique, and the way you handle it is unique as well. Some strategies might not work for you, and that’s completely okay. The important thing is that you don’t give up.